Action call over soaring oil prices

British Chambers of Commerce policy head Chris Hannant called for urgent action after crude reached its latest record of 135.09 US dollars a barrel on commodity markets.

Prices have since slipped back, but oil is still more than a third more expensive than at the start of the year and around double the cost 12 months ago.

This year's relentless rises amid global supply fears have piled pressure on motorists, who on Wednesday faced the highest monthly rise in average diesel prices this century, as well as business, many of which rely on oil for raw materials.

Mr Hannant joined growing calls for Chancellor Alistair Darling to scrap this autumn's proposed 2p rise on fuel duty.

He said: "Oil prices hitting new highs of 135 dollars a barrel is pushing businesses to the absolute edge. Something needs to be urgently done or increasing numbers of companies will be left with no choice but to pass extra costs onto customers.

Mr Hannant's warning came as figures showed a record number of manufacturing firms were expecting to put prices up in the coming months as a result of oil price rise pressure.

Forecourt data from the AA showed UK drivers are paying an average of 113.98p per litre of unleaded petrol, up 18% from a year ago, and 126.35p for diesel, making it 30% more expensive than a year ago.

The motoring organisation said a five dollar leap in the price of oil will add potentially another 2.5p to petrol prices and take a month to work its way through to the pump.

President Edmund King said: "The threat of even higher prices in the pipeline will perch like a vulture above UK forecourts waiting to pick an even bigger hole in the pocket of drivers and consumers."